The Microsoft Memo

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The Microsoft Memo

From the office of Linus TorvaldDATE: 10.31.2008TO: BILLFROM: LINUSRE: Will Steve kill WinX?

When you hired me three years ago, you had to realize that I was going to speak my mind, no matter what the consequences. You told me that if I ever hit a wall with Steve or his people, I should let you know. Well, here goes. (Yes, again.)

After all our technical and strategic conflicts, I bet you never guessed we'd be at each other's throats over a matter of pronunciation. But the fact is, when Steve goes to a marketing meeting, as he did yesterday, and pronounces our desktop system "Winux," he jeopardizes not only my personal reputation, but, more important, the very foundation of our business and software approach for the next decade. The desktop system is not "Winux," as in Linux. As he knows very well. WinX is pronounced like "winks."

Why is this important? Because the name WinX was not random. It was deliberately chosen to express the strategy behind a 24-month engineering marathon inside Microsoft. We've built a Windows desktop and application framework around a Linux operating system, and both sides of this equation - open source and proprietary - are needed for our plan to continue to work. By talking about "Winux," Steve blurs the distinction between Linux and WinX. Worse, he implies that we have taken over Linux for our own selfish ends. This makes the development community nervous, slows contributions from coders, and creates a huge amount of unnecessary noise.

Steve prefers to bury the origins of WinX because he has never been a true supporter. Even after admitting I was right and positioning himself to reclaim a leadership role, he seems to think that we can return to the days of monopoly power. I know you've said you won't play referee anymore, but I want my version on the record with you because sooner or later this is going to make it up to the board.

When you first approached me, you guys had a dozen strategies floating around about the open source threat to Microsoft. Steve was out there with his Get the Facts campaign, explaining how Windows was cheaper, faster, and more secure than Linux. Meanwhile, he was making thinly veiled threats to blow the industry sky-high with a massive, patent-based counterattack. In other words, he was saying, "Our products are better, and if you don't buy them we will kill you." Not exactly the way to win friends and influence people, but that's not Steve's style, right?

This was never going to be effective - and it wasn't. Eventually, the IT managers were going to read the studies. Today Steve says that he was just stalling to allow Microsoft's WinX strategy to mature. Every time I remind him that he was totally anti-Linux back in 2005, he claims that my problem is that I'm capable of having only one aim at a time, which is inappropriate in what he calls a "mainstream business environment."

"Who do you think had the idea of hiring you, Linus?" he says, and laughs. Is this true, Bill? You always told me it was your idea.

If he's telling the truth, and you guys were already committed to a WinX-like approach, then he's a great actor, I'll give him that. Because it sure looked like Steve had lost contact with reality. He was going around saying that there was no significant adoption of open source anywhere and that Windows had never been stronger. But most of the Web servers in the world were running Apache, MySQL, and PHP - all open source. Then came the first degradation in the market share of Explorer, as users began switching to Firefox. Meanwhile, there were offers all over the Web for open source software that replicated basic Microsoft Office features for free. With nearly 50 percent of the company's profits coming from Windows and almost 40 percent from applications like Office, open source was aimed at the heart of our - well, your - business.

Everybody around Steve dismissed Firefox as unimportant. But Firefox taught people that you could replace pieces of the Windows desktop with open source software. That was a crack in the seamless facade. You guys were the experts at demonetizing whole sectors of the industry to protect the OS. But how were you going to do that against products that were free? I can't deny that I found a certain poetry in that dilemma.

Back in 2005, nobody outside Microsoft - and remember, I was one of them - would have ever guessed Steve was stalling when he was waging war against open source. All that bluster just made him look terrified. In the open source community, we figured we'd be ready with a complete desktop alternative by the time "Longtime" was released. Every month brought improvements in open source tools, and a massive upgrade wave was looming.

I guess in the end I don't really care if Steve claims to be a strategic genius. While I doubt he was just stalling, I'll accept that he was hedging. Fine - Steve wanted insurance.

Myself, I thought I was making some pretty outrageous demands. I was stunned when you agreed to accept the General Public License mandating that everything you added at the level of the new operating system would remain open. But you've been true to your side of the bargain, and you've won my respect. You never made me alter my goal, which was world domination for Linux. I'll never forget your line: "Come on, Linus, infect the mothership." I still believe that was the best recruiting pitch ever uttered. We both took a lot of criticism from our partisans, but look what we've accomplished. The world is using software that doesn't suck! I hope you don't think I'm being arrogant, Bill, when I suggest that some of the glory has rubbed off on you.

Steve says I'm paranoid, that he's just kidding about "Winux," and that I didn't used to mind. It's true that at the beginning his joke had some good effects. The Longtime people hated hearing him say "Winux" because they immediately understood that an open source OS would take all the air out of their project. By demoralizing the Longtime leadership, he made it easier for us to absorb the best Longtime programmers into the crucial work of cloning the system's features for WinX. (Back then, my revenge was to sneak up on Steve's Longtime friends and whisper in my best accent, "We are the Borg. You will be assimilated. Your biological and technological distinctiveness will be added to our own. Resistance is futile." They hated that.)

But now it's time to grow up. We've proven that users don't care what operating system lies beneath the surface. They care about the reliability and security of their working environment, about the investment they've made in learning how to use their computers, and about the feature-set in their applications. We are giving away the OS while selling WinX, and it looks like we've settled at 70 percent market share, from 90 percent.

Under the old business model this would have been catastrophic. As long you were relying mainly on the OS monopoly, any demonstration that there was another way would cause the whole company to implode. But under the new system, a more competitive market is a net positive for us. The risk of a massive defection is eliminated because we're focused on serving customers rather than strong-arming them into upgrades. And while we can't charge the "monopoly tax," we are still the dominant company by any measure, and we gain from every expansion in the market. We've even gained some leverage in China.

Meanwhile, Steve is locked into a 2005 mentality. He seems to secretly believe that now that the operating system is open, we're going to collapse and have to return the war chest to shareholders or go into real estate or start launching commercial satellites or something. It's as if he doesn't have faith in his own company. You've got to pump him up a little, because his fear is contagious. Yes, the OS monopoly is gone, and there's nothing he can do about it. Once he gets through crying, he should open his eyes to how much leverage we still have.

The latest two quarters show we're only getting stronger. With an open, universal operating system, users still crave the familiar look and feel that Microsoft sells them. We've got a suite of applications that work closely together. We've got an application development framework that encourages everybody in the industry to write apps that integrate into our desktop suite - and that increases the market for WinX. The money saved by customers who get a free OS is spent buying our desktop interface and our proprietary apps that run on it, not to mention the service contracts and extended upgrade licenses. Even the open source competition is weaker because the powerful energy that used to be devoted to trying to defeat Microsoft is channeled into improvements in the OS, from which we all benefit. Look at it this way: The open source coders are now working for us.

Yes, I know that independent software companies dominate hundreds of smaller markets, as well as the entire illegal file-sharing world. But when it comes to desktops for the average Joe, WinX is becoming the new standard. Among those who know how the industry works, the phrase "open source threat to Microsoft" seems almost quaint.

You understand now why pronunciation is so important? WinX runs your desktop on top of the open OS. It's not Winux versus Linux, it's WinX plus Linux. That remains the essence of our strategy. We need the open source guys, and I don't want them antagonized.

Obviously, Steve still doesn't get it. He wants to migrate back into a proprietary, or at least a hybrid, path. He's talking about scheduling regular changes into WinX so that non-Microsoft application developers who want to integrate into our desktop are always a step behind. "Let's get them back on the treadmill," he said yesterday.

Finally, if you think that the Sony-Disney-MS deal is important, you better quiet Steve down. When the entertainment companies decide that we're using WinX to control access to their customers, they'll abandon us and build their own open source desktops. We don't have exclusive control anymore, and we can't act like we do. Steve's only answer, when I bring this up, is his old threat of patent Armageddon, which just shows how behind the times he is. He still dreams of a Pax Microsoftius, where you and he reign benevolently over a kingdom of happy, captive users. Steve scares me, Bill. He just doesn't accept what we're doing.